October 30, 2024
Allworth financial advisor Darren Dindinger, MBA, CFP®, CRPC®, helps you start thinking ahead so you can kick-off the New Year on the right financial foot.
For centuries, people have used the start of a new year to reflect, set goals, and commit to personal growth. Resolutions are a powerful tradition, but let’s be honest—many don’t last. However, that doesn’t mean we should stop trying.
In fact, when it comes to money, making financial resolutions can truly be life-changing. Why? Because unlike some other resolutions, financial progress is measurable. You can count it, track it, and see the results over time.
Whether you’re someone who loves making New Year’s resolutions or avoids them completely, there’s no wrong time to build better financial habits. Here are three essential habits that can help you make 2025 your best year financially.
One reason so many financial resolutions fail is that they’re too vague, or they require big, sudden lifestyle changes. “Save more” sounds great, but without specifics, it’s easy to lose track. The key to success is breaking your goal into manageable steps and automating the process whenever possible.
If you're still working and have access to a retirement plan—such as a 401(k), 403(b), or IRA—start by increasing your automatic contributions. It doesn’t have to be a dramatic jump. Try adding just 1% or 2% more. If you get a pay increase each year, consider using a portion of that to increase your contribution each year, some to keep for now and some to put towards retirement. Every little bit counts, and the earlier you start, the more time you have to benefit from compound growth.
Take a few minutes to log in to your employer’s plan website or your bank’s site and make a small adjustment. You likely won’t notice a big difference in your paycheck, but over time, that extra contribution can make a significant impact on your retirement savings.
Debt has a way of creeping up on us, and in many cases, it feels like we’re stuck choosing between paying down debt or building up savings. The right balance depends on the type of debt you have and your overall financial picture.
First, assess your situation with the help of a trusted financial advisor that is a fiduciary—someone who is required to act in your best interest. Together, you can evaluate your budget and determine whether it makes more sense to prioritize debt reduction or ramp up your savings.
If your debt is high-interest, like credit card balances, it’s often better to focus on paying it off first. With rising interest rates, carrying high-interest debt can quickly erode your financial stability. Even so, I’d still recommend contributing something to your retirement savings, especially if there is company matching program. Get the matching money the company is offering, and then focus on the high-interest debt.
On the other hand, if your debt has a lower interest rate (like a mortgage), it may be more beneficial to direct more funds toward saving and investing. The key is to avoid an “all or nothing” mentality—both paying off debt and investing are important for long-term success, but finding the right balance is crucial.
Conversations about money can be challenging, especially between partners. In my experience, when couples avoid discussing finances, small issues often grow into major problems over time. The only way to address these challenges is by having open, honest discussions.
Money is one of the most common sources of conflict in relationships, but it doesn’t have to be. I recently read a story about a couple who had been married for 82 years. Their secret to a long and happy marriage? They made it a habit to sit down and talk through difficult topics, including money.
In 2025, I encourage you to make financial transparency a priority. Whether you're setting shared financial goals or simply checking in with each other regularly, open communication builds trust and reduces stress.
For those who are single, this principle still applies—be honest with yourself about your financial situation. Take stock of where you are and where you want to be, and don’t shy away from making tough decisions that will benefit your future.
If finances are causing friction in your relationship or personal life, use this year to bridge the communication gap. You don’t have to go through it alone, and as your financial advisor, I’m here to help facilitate those conversations and guide you in the right direction.
The habits we build today can determine our financial security tomorrow. By automating your savings, finding a healthy balance between debt reduction and investing, and fostering open communication about money, you can set yourself up for success in 2025 and beyond.
As always, if you need help navigating your financial plan or would like to review your progress, I’m here to help. Let’s make this the year you take control of your financial future and achieve the goals that matter most to you.
I remember seeing my father nearly lose everything during the dot-com bubble. Although he was working with an advisor, he felt ignored and alone during this life changing event.
That’s why I’m passionate about educating my clients every step of the way. I don’t view financial planning as just a job. My goal is to help you to appreciate the wealth you’ve created and use it towards your passions as you transition into your retirement years.
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